MediaTek’s Q1 pretax profit hits NT$3.92bn

Staff writer, with CNA

Thu, May 02, 2013 - Page 13

MediaTek Inc (聯發科), the nation’s biggest handset chip designer, yesterday said its pretax profit for the first quarter reached the higher end of the company’s target range on the back of solid smartphone chip demand from China.

In the January to March period, pretax profit totaled NT$3.92 billion (US$132 million), compared with the target range of NT$3.31 billion to NT$4.05 billion the company had forecast.

Earnings per share before tax stood at NT$2.9 in the quarter, MediaTek said.

However, pretax profit was down 21.73 percent from the previous quarter, reflecting the slow seasonal effects in the global semiconductor business. The first-quarter figure was up 50.8 percent from a year earlier.

The pretax profit and operating profit data for the first quarter was compiled on an unaudited basis.

MediaTek said it recorded NT$3.09 billion in operating profit for the first quarter, beating the median level of NT$2.99 billion in it target range of NT$2.69 billion to NT$3.29 billion.

Consolidated sales totaled NT$23.97 billion in the first quarter, down 10.33 percent from the previous quarter, but closer to the higher end of the firm’s target range of NT$21.9 billion to NT$24 billion.

MediaTek is scheduled to hold an investors’ conference on Monday to disclose details of its results for the first quarter and give indications for the second quarter.

In a research note issued on Monday, Daiwa Capital Markets expressed its optimism about MediaTek’s second-quarter operations, expecting its consolidated sales would rise 17 percent from the first quarter, with shipments of smartphone chips likely to total 50 million units, up 28 percent from an estimated 39 million units in the first quarter.

“We envisage an improving gross margin trend for the first quarter of 2013 and beyond, on product mix enhancements,” Eric Chen (陳慧明), a semiconductor analyst with Daiwa in Hong Kong, said in the note.

MediaTek’s MT6572 and MT6589 chips should become mainstream chips from the middle of this year, Chen said.

Its gross margins are forecast to be 43.5 percent for the second quarter and 44.5 percent for the third quarter.

Chen also said the threat of US chipmaker Qualcomm Inc sparking a price war in the quad-core smartphone chip segment in the coming quarters to gain market share is probably not as great as the market has feared.

Daiwa raised its target price on MediaTek shares to NT$415 from NT$395, while maintaining a “buy” recommendation on the stock.

MediaTek shares closed down 0.41 percent at NT$360 on Tuesday. The stock exchange was closed yesterday for the Workers’ Day holiday.